Beeb to fund ad-mungous Local TV for local people

Jeremy Hunt, Secretary of State for Fun Stuff, has proposed filling white space spectrum with Local TV, and the BBC will chip in £40m to help make it viable.

The plan calls for a new company to manage a new multiplex, squeezed into 8MHz of white space (locally unused) spectrum and built using £25m of BBC cash. Local TV companies will then be able to broadcast on that multiplex, only paying the running costs, and the BBC is committing to buying £15m worth of content from them over the following three years.

Both the multiplex-running company (referenced as MuxCo) and the Local TV franchises will be selected by beauty contests; the company judged most able to provide the service will get the bandwidth, rather than the highest bidder.

But even with 8MHz of spectrum, the new services will only reach about half the population, so the Department for Culture, Media and Sport reckons this is just an intermediate step towards getting Local TV onto IP services. That 8MHz of bandwidth is also right in the white spaces that everyone is so eager to exploit for cheap networking: putting such a chunk of spectrum off limits will seriously impact the potential of white space networks.

So that just leaves questions about who's going to make Local TV, who's going to watch it and, critically, who is going to pay for it.

The Department's proposals (38-page/668KB PDF, dull, but mercifully short) don't address that, but they do attempt to clarify the demand for Local TV and explain how it should be paid for. Apparently, today, ninety per cent of us regularly consume local news of some sort, and therefore have enough of an appetite for Local TV to make it commercially viable.

To help the revenue side, the proposal suggests removing the 12-minutes-per-hour restriction on commercials, allowing Local TV to put out as many adverts as it likes and relying on viewers to judge what is too much.

When it comes to getting viewers, the department is putting great store in the EPG positioning, hoping to grab the "8" slot, which is empty in England – though that will be subject to agreement with the existing Freeview broadcasters. Sky and Virgin have apparently had "encouraging discussions" about prominent positioning of Local TV services, though how that will translate into reality remains to be seen (in Sky's case it is almost certainly moot, at least until Sky's IPTV service becomes the dominant distribution channel).

That's vital as there are already a surprising number of Local TV services dotted around the country, mostly transmitting over the internet to a very limited audience. Very few make any money, and the only really determined attempt to broadcast Local TV was Manchester's Channel M, which has failed to make money under various owners over the last decade.

Those with long memories might remember that ITV franchises used to have a beauty-contest element, which was replaced with a biggest-bidder approach by Margret Thatcher's government. This was followed by wholesale consolidation and centralisation. The new proposals do recognise the risk of that happening again, which is why they reject the idea of a single company deferring content production to local franchises.

Prominent EPG positioning and relaxed rules on advertising, not to mention negated infrastructure costs, can only help make Local TV viable, but ultimately it comes down to whether viewers really want Local TV for local people, or if they'd prefer the big names and better production values than only a national broadcaster can provide. ®